updated 08:20 pm EST, Wed January 26, 2011

Startup must still disprove interference claims

Confirming a leak that emerged earlier this week, the FCC has officially approved a proposal from satellite-broadband startup LightSquared. The move will lift a requirement that barred companies from deploying terrestrial phone networks using spectrum originally allocated for satellite-based phone systems. The startup now will be able to lease portions of its airwaves for standard smartphones while the company expands its satellite broadband endeavors.

The proposal has been met with criticism from companies and government agencies involved in GPS-related technology. Opponents claim widespread use of a satellite-based broadband system will interfere with GPS signals.

In response to concerns from the Department of Defense and Department of Homeland Security, the FCC has limited the initial scope of LightSquared's plans until the potential for interference can be gauged, according to a Wall Street Journalreport (sub. required). If the criticism proves baseless, the Commission may move to allow the startup to offer wholesale broadband service.